My 2 family property was "Owner Occupied" from 2000 to 2012. Depreciation was set up at 50% by an accountant the first year I owned the property. From 2001 on, I've used TurboTax mirroring the accountant's 50% calculation. In 2012 when I rented my unit, I didn't realize that I should have change the depreciation to 100% (Which I believe would have given me a bigger refund, but oh well...). Now I'm thinking of selling the building, so while trying to figure out what I'd owe in Capital Gains on the depreciation, I discovered this error and I'm not sure if this is going to cause a problem. Just wondering if anyone out there had any experience with a similar situation or if anyone could give me any tips.
You'll need to sign in or create an account to connect with an expert.
Since the error started more than 3 years back, you flat out can't use TurboTax to fix this problem. To fix it and minimize (or possibly eliminate) the potential back-taxes fines and penalties, you need to file IRS Form 3115 - Change of Accounting Method. While the TTX program does include this form, unless you are a tax professional it's highly recommended you seek professional help for this. The 3115 can be *very* complicated and even the smallest of mistakes can turn the mistake you're trying to fix, into a never ending nightmare with the IRS from which you will never awaken. Please seek professional help this year, and do it now. Don't wait until it's time to file your 2019 tax return either. The longer you wait, the more costly this can be.
Thank you both for the information~! I will contact the CPA that did my taxes the first year I owned the property.
Still have questions?
Make a postAsk questions and learn more about your taxes and finances.
Raju15
New Member
kf_7
New Member
trmy
New Member
taxgurl23
Returning Member
mr-john-james82
New Member
Did the information on this page answer your question?
You have clicked a link to a site outside of the TurboTax Community. By clicking "Continue", you will leave the Community and be taken to that site instead.